V. Sampath vs Praveen Chandra V. Shah and Another

M. Karpagavinayagam, J.—Both these revisions are being disposed of in this common order, since the issue raised in these petitions is

same.

The petitioner is the accused in two private complaints in C. C. No 3501 of 1992 and C. C. No. 3299 of 1992 on the file of the VIIIth

Metropolitan Magistrate, George Town, Madras. The said complaints were taken on file in June, 1992, for the offence u/s 138 of the Negotiable

Instruments Act, 1881.

The allegation in these complaints is that the petitioner, in pursuance of an agreement of sale dated May 5, 1989, issued two cheques to each of

the parties in these two complaints towards the balance sale consideration and that when the cheques were deposited into the bank, the same were

returned on account of insufficiency of funds and that in spite of the receipt of demand notice, the petitioner did not pay the cheque amount.

The petitioner, on receipt of summons filed applications, M. P. No. 1699 of 1996 in C. C. No. 3301 of 1992 and M. P. No. 1700 of 1996 in

C. C. No. 3299 of 1992, for his discharge u/s 245 of the Criminal Procedure Code. The ground urged in the said petitions was that the cheques

were issued only as a security and unless the sale transaction is completed, the petitioner is not liable to make any payment and as such, the

cheques were not issued for discharge of any debt or liability and consequently, there is no prima facie case against the petitioner for the offence

u/s 138 of the Negotiable Instruments Act.

The learned magistrate, by the orders dated August 2, 1996, dismissed these applications holding that the said ground was not tenable. It is

these two orders which are being now challenged in these two revisions.

Mr. Natarajan, representing Mr. Anand Das Gupta, counsel appearing for the petitioner, while reiterating the ground urged before the trial

court, would submit that, since even according to the complainants, the sale transaction was not completed, the petitioner was not liable to make

any payment towards the balance of sale consideration and as such, he could not be considered as having committed the offence u/s 138 of the

Negotiable Instruments Act.

This is resisted by Mr. Jayesh Dolia, representing Aiyar and Dolia, counsel appearing for the respondents/complainants stating that the

averments in the complaints and in the sworn statement would clearly show that the petitioner towards discharge of balance of sale consideration

issued the cheques and the same were returned and that, therefore, the submission made by the counsel for the petitioner has no substance.

Before launching into the discussion on the issue raised before this court, certain dates and factual details are relevant to be noticed. They are as

follows :

(a) The respondents herein filed complaints against the petitioner for the offence u/s 138 of the Negotiable Instruments Act in fune, 1992.

Immediately, on receipt of summons, the petitioner filed petitions for quashing of these proceedings in Crl. O. P. Nos. 2091 and 2092 of 1993

before this court and obtained stay. In those petitions, the very same ground was raised. However, by the orders dated October 12, 1994, this

court, while disposing of the said petitions along with a batch of similar petitions, dismissed the same by observing that this point could be urged

only during the course of trial,

(b) After disposal, again fresh summons were issued to the petitioner. Therefore, the petitioner, on receipt of those summons, on July 6, 1996, filed

the applications for discharge before the lower court in M. P. No. 1699 of 1996 and M. P. No. 1700 of 1996 in C. C. No. 3301 of 1992 and C.

C. No. 3299 of 1992, respectively, u/s 245 of the Criminal Procedure Code. After hearing the parties, the learned Metropolitan Magistrate

dismissed the petitions for discharge on August 2, 1996. Thereafter, the petitioner has again approached this court through these revisions.

Thus, the directions, issued by this court in the orders dated October 12, 1994, asking the petitioner to raise this point before the lower court

during the course of trial, have not been given effect to by the petitioner. Instead, he straightaway filed the discharge petitions u/s 245 of the

Criminal Procedure Code before the trial court even when the trial is not commenced.

This in my view is not proper for two reasons. (1) As per the orders of this court, this issue should have been raised only during the course of

the trial. When the High Court did not incline to give any finding on this issue, even before the commencement of trial, the trial court cannot be

asked to decide the same issue before the appropriate stage is reached. (2) Section 245 of the Criminal Procedure Code would relate to warrant

cases. The offence u/s 138 of the Negotiable Instruments Act is to be tried as summons case. Therefore, the petitioner cannot maintain the

petitions for discharge u/s 245 of the Criminal Procedure Code.

No doubt, it is true that in summons cases, on receipt of summons, he could file an application u/s 204 of the Criminal Procedure Code to

drop the proceedings raising preliminary objection. But, in this case, that stage has been crossed. After several hearings, that too after four years,

though the complaint was taken on file and summons were served in June, 1992, he has filed the applications for discharge only on July 6, 1996. In

the meantime, as indicated earlier, the petitions for quashing were disposed of by this court as early as October 12, 1994. Therefore, the belated

petitions, that too, u/s 245 of the Criminal Procedure Code in my view, are not maintainable.

However, let us now come to the main issue raised in these revisions. Counsel for the petitioner would submit that the cheques were issued

only as security, that mere issuance of cheques would not make any obligation for payment, that unless the sale transaction is completed, the

petitioner is not liable to make payment and that therefore, it cannot be said that the cheques were issued for discharge of any debt or liability.

In order to support this submission, learned counsel for the petitioner would place reliance on the decisions in Zakir Sadagar v. Dolegobind

Ghose AIR 1955 Pat 201 and Union of India (UOI) Vs. Raman Iron Foundry, in which it is held that the purchaser is not bound to part with the

price except on a complete conveyance and that a sum would be due to the purchaser only when there is an existing obligation to pay it in

praesenti.

Learned counsel for the petitioner would also submit, by referring to the definition of ""contract of sale"" as contained in Section 54 of the

Transfer of Property Act, 1882, that a mere agreement of sale does not by itself create any interest in or charge on such property and as such, in

the absence of completion of sale transaction, the petitioner cannot be liable to make any payment towards the sale consideration.

I have given my anxious consideration to this submission. The averments in the complaints and the sworn statement would clearly show that

there was an agreement for sale on May 5, 1989, that the sale consideration was fixed at Rs. 1,70,500 and that it was agreed to pay the entire sale

consideration within one year from the date of execution of the said agreement. However, till November, 1991, the petitioner had paid only a sum

of Rs. 1,35,000. In that context, the accused issued cheques on November 5, 1991, to the complainants towards the balance of sale consideration

and towards interest on the belated payment. The reading of the said agreement referred to in the complaint would go to show that the petitioner

was put in possession of the sale property and that he was nominated as a power of attorney for the complainants empowering to lay out the said

land into plots of house site and to do all consequential and supplementary acts, deeds, things in all matters in respect of the said land.

Section 54 of the Transfer of Property Act, 1882, defines ""sale"". ""Sale"" is a transfer of ownership in exchange for a price paid or promised or

part-paid and part-promised. According to this section, delivery of tangible immovable property takes place when the seller places the buyer, or

such person as he directs, in possession of the property.

Thus, the reading of the definition of sale would give a clue to answer the question as to when the transaction is completed. The entrustment of

the property, even on the date of agreement of sale to the petitioner by the respondents herein, is not disputed before this court. Therefore, it

cannot be contended that the cheques were issued only as security, more particularly, when the case of the complainants is as averred in the

complaints and the sworn statement, that the cheques were issued towards the balance of sale consideration.

It is also relevant to note that Section 138 of the Negotiable Instruments Act would provide that it shall be presumed unless the contrary is

proved, that the complainant received the cheques from the accused for the discharge of any debt or other liability.

Therefore, the submissions made by counsel for the petitioner, on the strength of the decisions referred to above, cannot be accepted.

The decision cited by learned counsel for the petitioner in K. Kumar Vs. Bapsons Foot Wear, rendered by this court, in which it is held that

mere issuance of cheques in the course of the business and its dishonour would not satisfy the requirements needed for making out an offence u/s

138 of the Negotiable Instruments Act, is not helpful to the petitioner, since, in the instant cases, there is a specific allegation that the cheques were

issued towards balance of sale consideration of the property, the possession of which was handed over on the date of sale agreement itself.

In view of the above discussion, the contention of counsel for the petitioner would not be a valid one and consequently, these revisions deserve

to be dismissed. Accordingly, they are dismissed. Consequently, Crl. M. P. Nos. 3196 and 3197 of 1996 stand dismissed.

The trial court is directed to proceed with the trial and dispose of the same as expeditiously as possible. The registry is directed to despatch the

records to the trial court forthwith.